The two companies plan to mass-produce organic electroluminescence (EL) TVs and the Japanese electronics giant is also considering setting up a joint venture with the Taiwanese firm to manufacture panels, unnamed sources told the Yomiuri Shimbun on Thursday.

The company hopes to combine its technology with AUO's production system to compete with South Korea's Samsung Electronics, the sources added. It hopes to emulate the business model of partnerships where a Japanese company exchanges its cutting edge technology for a Taiwan-based firm's efficient production system.

Sony had been the first to put organic EL TVs on the market in 2007, the report noted. The news comes just months after the company reportedly stopped production in January 2012.

When contacted, AUO told ZDNet Asia that it does not comment on media speculation. Sony, too, stated that its has "made no announcement" with regard to the partnership.

"As explained in the Sony corporate strategy meeting on Apr. 12, 2012, we are considering various possibilities regarding the development and commercialization of OLED including alliances. However, at this moment, we have nothing to announce or comment on further details," a company spokesperson said.

Organic EL TV sets do not require a backlight behind the screen, unlike LCD ones, and this allows the panels to be thinner and consume less electricity. They are also typically able to reproduce colors more accurately.

Elly grew up on the adrenaline of crime fiction and it spurred her interest in cybercrime, privacy and the terror on the dark side of IT. At ZDNet Asia, she has made it her mission to warn readers of upcoming security threats, while also covering other tech issues.